Reprinted from the Congressional Record, Proceedings and Debates
of the 94th Congress, First Session. Vol. 121, No. 64. Thursday, April
24, 1975.

If we are to have an energy system that strengthens
our economy and serves the real needs of our citizens, it is now plain
that drastic reforms are required.

The first question that must be answered in formulating
a national energy policy is whether the government or the petroleum industry
will guide and direct what happens.

The American people have had it with the oil companies.

They are outraged by disclosures of frauds, price
fixing conspiracies, and political sluch funds.

They are suspicious of the claim of the oil companies
that they need bigger and bigger profits for more drilling and exploration,
when they witness a steady decline in our production and proven reserves
of oil and gas.

They are tired of living under the threat that
a few oil-producing countries will embargo us and disrupt our economy.

They are incensed by special tax privileges which
produce windfall profits -- but no improvements in the U.S. oil outlook.

And they are at the end of their rope with governmental
leadership that has allowed such an anti-competitive system to prosper
and dominate our national life.

What the American people want in 1975 are policies
that will end special privileges and practices which stifle competition.

They want their government to compel competition
and halt the manipulation of energy prices by all segments of the energy
industry.

They want their government to control all oil
imports and arrange for embargo-proof systems of supply.

They are not demanding a nationalized energy system,
but they want the energy resources owned by all of the people developed
for the common good under plans and policies that will guarantee adequate
energy for future needs, protect the environment from despoliation and
protect consumers from exploitation.

The energy crisis has pitched us into a serious
predicament: the country at once, must grapple with the interrelated problems
of economic recovery, runaway prices, shortages, increases in pollution,
and threats to foreign policies vital to our future.

The American people want the hard facts about
this energy predicament. They are willing to make sacrifices if sacrifices
are necessary, but they are convinced the energy policies of the past are
working against the national interest. In short, they want our energy destiny
taken out of the hands of oil company executives and put in the hands of
the people.

It is increasingly clear that Americans cannot
have the kind of energy system they want unless the system itself is reorganized.
Patchwork solutions will not be adequate. Structural changes we needed,
changes which will enable us to shape an energy economy which serves the
common good.

We have had no national energy policy in the past
because as long as petroleum was cheap and seemingly superabundant, there
did not seem to be a need for one. We called our policy a "free market"
policy, but in fact it consisted largely of oil industry freewheeling dedicated
to the proposition that what was good for the oil companies was good for
the country.

This policy is a disaster for consumers in a time
of shortages. It jacks up all prices and enlarges the unbridled power of
those who control our petroleum. The real energy crisis we face today is
not -- as some oil industry spokesmen would have us believe -- a short
term crisis of production: even if herculean efforts are made, our lives
in the next decade will be dominated by energy shortages. The crisis centers
on conservation, the rapid development of sound alternate energy sources,
and actions to break the iron grip a few large oil companies have had on
our energy system.

POLICY GUIDELINES

Action to implement this new national energy policy
should be guided by eight broad concepts:

(a) awareness that we live on a planet where energy
resources are scarce, not abundant, that we must use them with a high degree
of efficiency and conserve energy wherever possible.

(b) the premise that whatever energy is available
should be allocated to assure everyone enough for basic necessities at
fair prices and according to priorities that protect jobs and promote economic
health;

(c) the idea that all laws and regulations should
be reformed to penalize waste and encourage energy thrift;

(d) an understanding that environmental protection
must be a major objective of any national energy policy;

(e) the belief that we should take steps now to
reduce our dependence on unreliable sources of imported oil;

(f) a steadfast commitment to support whatever
level of research and development is needed to give this country stable,
adequate energy supplies for the long haul;

(g) a bias for open energy industries which compete
aggressively for markets in all sectors of our energy economy; and

(h) a recognition that it is the job of government
to set policies and priorities that will reorient the energy future of
this country.

STRUCTURAL CHANCES IN THE U.S. ENERGY
SYSTEM

As stated, the framework of a national energy
policy will involve fundamental changes in our systems of supply and distribution.
Reforms, like the pieces of a puzzle, must fit together in a unified whole.
My plan takes the form of six interrelated proposals.

PROPOSAL I: BREAKING UP THE ENERGY
CONGLOMERATES

By any reasonable criteria of what constitutes
a concentrated industry -- high prices, inefficiency, lack of innovation
and exploration, bloated profits and the power to control and direct the
economy -- the energy industry qualifies; and is in clear violation of
the intent of the anti-trust laws.

The problem as now defined is not one of restraint
of trade -- but a naked question of who will determine America's energy
future.

The time has come to restructure the oil industry
and eliminate those features which stifle competition. This must be done
by legislation; there is too much at stake to wait for conventional anti-trust
proceedings.

Legislation should be enacted which would break
up the energy conglomerates. It should fix reasonable deadlines for divestiture
and prohibit any corporation from engaging in more than one phase of the
petroleum business. Once this restructuring is consummated, separate companies
would a) explore and produce petroleum, b) transport it, c) refine it,
and, d) market it at retail.

Such legislation should also prohibit the multiple
ownership of competing energy resources. Already four coal companies owned
by Big Oil account for 35% of domestic coal output. In addition, oil companies
control over 30% of the nation's privately-held coal reserves, and 50%
of the uranium reserves.

Major oil companies which have become energy conglomerates
are stifling the very competition needed to eliminate energy shortages.

The trend towards horizontal integration points
to the further need for price controls on all domestic fuels until such
time as divestiture is achieved and competition is injected into the energy
market. For in the absence of controls, the energy conglomerates are pushing
the price of all fuels -- oil, gas and coal -- up to the OPEC level.

This real danger is dramatized by what is now
happening in the coal industry. Under the combined pressures of short supplies
and increasing horizontal integration of the energy industry, coal prices
are rising towards the artificially high price level of OPEC oil. Even
independent coal companies, riding this trend for all it is worth, are
now reporting windfall profits. For example, two independent coal companies
recently reported annual profit increases of 669% and 340%. This policy
of inflated, OPEC-level prices for all fossil fuels, would institutionalize
inflation and make a return to economic vitality vastly more difficult.

PROPOSAL II: THE MANAGEMENT OF OIL
IMPORTS

The government must also take immediate steps
to reduce America's dependence on unreliable sources of imported oil.

To achieve this, legislation should be enacted
to accomplish the following:

a) The control over the importation of oil should
be taken out of the hands of the multi-national companies and placed in
the hands of the government. This should be done by reinstituting a system
of quotas under which a federal agency would determine the amount of oil
imported in order to reduce gradually our reliance on imports over the
next decade.

Import quotas adjusted quarterly, would insure
that all reductions in energy use come out of imports, rather than from
reduced domestic production, as has been the case in the past year.

b) Once the control over oil imports is vested
in the government, a bidding procedure and/or other appropriate negotiating
techniques should be instituted which would give the government the final
say over the source and price of all such imports.

In the 1960's our previous oil import quota program
was administered under a "preference" which favored Western Hemisphere
sources of supply (i.e. Venezuela and Canada). The new quota program should
contain a "reliable sources" preference which would enable the U.S. to
reduce -- and ultimately eliminate -- imports from the countries which
embargoed us in 1973-74 and tie our future supply sources to such nations
as Venezuela, Nigeria, Iran, Indonesia and Canada.

It is also urgent for the U.S. to start now to
create a national oil stockpile of one billion barrels, including a 300
million barrel military stockpile. The purchase of this reserve should
be rapidly escalated once the world price of oil falls to reasonable levels.

The paramount need of all the oil consuming nations
is the lowering of oil prices. Because our self-sufficiency is greater,
the U.S. should lead the effort to achieve this objective. We can do this
by keeping price controls on supplies of domestic oil and gas, by instituting
rigorous programs of energy conservation, by giving industry incentives
to switch from petroleum to coal -- and by other steps which will keep
steady pressures on the oil cartel.

One step we should not take is to attempt to negotiate
an international floor price for oil. Secretary Kissinger's proposal to
commit the U.S. and the other oil importing nations to such a price is
totally inexplicable. If we institute import quotas, adjustable on a quarterly
basis, prospective domestic investors in energy resources need fear no
loss of market from foreign oil at any price. At first glance, there is
a kernel of economic sense in the Kissinger plan, but on further analysis,
it blossoms into an absurdity. Whether we are talking about tertiary recovery
methods for oil, expensive off-shore development of gas, or the highly
capital intensive requirements of new synthetic fuels, all can be subsidized
directly by the government without extending that subsidy indirectly to
the OPEC cartel.

PROPOSAL III: THE MANAGEMENT OF
U.S. RESOURCES

A third structural reform should be the creation
by Congress of a new public agency with well-defined powers to manage our
publicly owned energy resources.

Our privately owned resources are rapidly depleting.
The great bulk of the remaining undeveloped fossil fuel resources of this
country are in public ownership. It has been estimated that close to 70%
of our undeveloped oil and gas resources lie under public lands, and that
at least half of our mineable coal and over 85% of our oil shale are likewise
owned by all the American people.

The time has come for the federal government to
play a larger role in the management of our energy future. We can no longer
afford to leave our lives and vital economic interests to the mercies of
an oil cartel and a handful of giant corporations that have forfeited the
trust of U.S. citizens.

This important agency (which might be called The
National Authority for Energy Management) should be chartered and given
the power to play a catalyst role in the development of the nation's publicly-owned
fossil fuel resources. It should be empowered:

1) to carry out the initial exploratory drilling
on the remaining offshore frontier areas on the continental shelves of
the Atlantic and Pacific oceans;

2) to develop sufficient producing oil and gas
wells on public lands to provide a yardstick on production costs against
which the performance of private companies could be measured;

3) to be the steward of the resources of all Naval
Petroleum Reserves, and have the exclusive responsibility to inventory
the petroleum resources within National Wildlife Refugees prior to any
decisions concerning the actual development of such resources.

4) to be the manager of the U.S. petroleum stockpile.

To propose the creation of this authority, is
not to propose the nationalization of the U.S. oil industry. To the contrary,
such an agency will provide a cutting edge that will sharpen competition
in the domestic industry.

Finally, government must take a more active part
in the development of new energy resources: solar, geothermal, fuel cells,
and a whole variety of energy conservation technologies. Under authority
already vested in the Energy Research and Development Administration, joint
government-industry corporations should be set up to insure that new technologies
are promptly introduced into the marketplace.

PROPOSAL IV: A NEW APPROACH TO NATURAL
GAS REGULATION

Of all the near term energy shortages we face,
the prospect of a serious natural gas shortage is the most ominous. For
example, some experts are forecasting a 40% drop in gas availability for
the North Central states by 1980. The natural gas industry has rightly
been a regulated monopoly since its inception. But with the President dangling
prospects of taking the lid off prices, it is not surprising that very
little new gas is coming to market.

With the current shortage in the sky-high price
of alternatives, decontrol of natural gas prices would be a multi-billion
giveaway to the Big Oil companies who also monopolize gas production. Congress
must act to end the uncertainty over the future of the natural gas industry.

The new legislation being developed by the Senate
Commerce Committee is a step in the right direction. It will permit somewhat
high prices for new gas discoveries to reflect higher costs, together with
end-use controls phasing out the wasteful burning of natural gas as boiler
fuel. This legislation will elicit all the gas that can be economically
found and still protect the consumer against price-gouging.

We must remember that the fundamental answer to
the natural gas shortage is to switch America's industrial boilers to coal
as rapidly as possible in conformity with suitable environmental safeguards.

In the meantime, it is crucial that the Federal
Power Commission make a decision that the gas from the Prudhoe Bay Field
in Arctic Alaska be brought down the MacKenzie River Valley to replenish
the dwindling supplies of the north central states. Canada will benefit
as well as the U.S.

PROPOSAL V: LONG-TERM DIRECTIONS
FOR THE COAL INDUSTRY

With the decline of our petroleum reserves, coal
must once again become a key factor in our energy economy. The recent controversy
over strip mining has temporarily clouded the outlook for coal, but now
that new ground rules are about to be written into law, I am confident
the coal industry will respond to the challenge.

Unfortunately, in recent years, the promise of
widely expanded development of western coal has been overstated while the
problems have been woefully underestimated. The Ford administration and
one segment of the coal industry have pushed for headlong stripmining of
western coal, despite its relatively low quality and the high cost of transporting
it to the industrial states. Moreover, as long as the vast tracts of western
coal are controlled largely by oil, railroads, and big mining concerns,
there is little room for competition from the independent coal producers
who have long played an important role in the eastern coalfields. And too
many states have competed for the jobs that come with stripmining by ignoring
the environmental and social devastation that also accompany it. Likewise,
the Administration has closed its eyes to these matters in buying the strip-at-any-cost
philosophy of the big coal producers.

Congress, however, has risen to the challenge.
The balanced bill that will soon be on the President's desk will set fair
national ground rules for coal development. This legislation has said to
the coal companies, "Strip if you will, but not by permanently destroying
the western way of life, not by poisoning the streams and groundwater as
you have in the East, not by leaving productive farm and range lands desolate
for centuries." We have tried to assure that any shift in production from
eastern to western coal, from deep mined to stripmined coal, will not leave
us with ghost towns in the East and ill-planned boom towns in the West.

In addition, the comeback of coal must be tied
to a planned renaissance for American railroads. Nothing can do more to
promote energy conservation than the rebuilding of our most efficient means
of transportation. Coal cannot play the much larger role that it clearly
must unless the government gives an immediate high priority to railroad
rehabilitation.

PROPOSAL VI: AN OBJECTIVE ASSESSMENT
OF NUCLEAR POWER

There is probably no area of energy policy more
fraught with emotion, uncertainty, and dubious information from both proponents
and opponents than nuclear power generation. On the one hand, utilities
advertise that a nuclear power plant is "no more dangerous than a chocolate
factory", and at the same time we hear prophesies of doom from informed
nuclear opponents.

We need to know the real risks and benefits of
nuclear power plants: what the short-and-long-range costs are, what the
most reliable and economical technologies are. Beginning next week and
continuing throughout the year, the Subcommittee on Energy and the Environment,
which I chair, will take a leading role in promoting a national dialogue
on nuclear energy. For the first time, both sides of the nuclear debate
will get a fair hearing in a neutral forum. We will undertake a comprehensive
analysis of the hard technical data to present in comprehensible form all
that is known about nuclear safety, and to pinpoint the unanswered questions.

Only with this kind of solid background, so lacking
in the hyperbolic claims which have dominated the nuclear debate, can we
make a rational, informed decision on how far and how fast the nation can
afford to go.

TRANSPORTATION REFORMS AND ENERGY
EFFICIENCY

Personal mobility has been the most conspicuous
boon of the cheap energy era. But we have paid a frightful price for the
psychic and economic benefits of this freedom in the form of congestion,
pollution, atrophied inner cities, and the disappearance of the neighborhood
as a functioning social unit. We have permitted, even encouraged, the decline
of public transportation by unneeded highways and inadequate financial
support, so that even today, in the throes of an energy and economic crisis,
we pour nearly three times as much federal money into highways as into
all mass transit modes. We have the means to reverse these trends. We can
replace our entire auto fleet in six or seven years if we make it a national
goal to do so. If we convert our automotive fleet to vehicles which will
get double the miles-per-gallon as today's dinosaurs, by 1981 (even assuming
we use our cars almost as much as we use them today), the consumption of
gasoline can be reduced 50%, or about 3½ million barrels per day.

The way to restore the auto industry to a condition
of health is to build small cars that will stretch our existing oil and
reduce our dependence on imported sources of supply. By gradual steps,
if our automakers manufacture more buses and new kinds of public vehicles
and provide more and better hardware for the new modes of public transportation,
the whole country will be more efficient and more prosperous.

CONSERVATION, JOBS AND THE FUTURE

In the past eighteen months, we have learned much
about the benefits and bonuses offered by a national strategy of conservation.
Industries which have eliminated energy waste have improved their profits
and made the jobs of their employees more secure, just as the practice
of energy thrift has enabled families to make significant savings in their
budgets. The fewer billions we spend oil OPEC oil, the more billions we
will have to spend on products and projects that benefit everyone in this
country.

A well-designed energy conservation program will
strengthen our economy in the years ahead. If the U.S. is a lean and efficient
country, it will be stronger socially and economically. Conservation will
mean shifts in patterns of investments and industrial growth -- but will
not mean reductions in employment.

To appreciate this prediction, it must be recognized
first that the energy industry, while capital intensive, provides relatively
few jobs. Today the energy industry accounts for nearly 10% of GNP but
provides only 3% of American jobs. Dollars spent on energy generate fewer
jobs than dollars spent elsewhere in the economy. To be more precise, it
requires an investment of about $150,000 to provide for one permanent job
in the energy industry, whereas only $22,000 is required in general manufacturing.

So whenever we substitute better workmanship,
more efficient machines or more carefully designed systems for wasteful
energy use, we not only employ more people in implementing the conservation
program itself, we also employ more workers when we spend the released
dollars that no longer must be invested in producing energy.

While broad economic projections are always uncertain,
the results of a pioneer University of Illinois study which attempted to
calculate the energy and jobs consequences of diverting $5 billion from
the highway construction program in to other sectors, are instructive about
the effects of various priorities. If the $5 billion were diverted to railroad
and mass transit construction, the study calculates there would be a net
saving of 61% in energy and a net gain of 3% in jobs. If the money were
put into water and waste treatment facilities construction there would
be a 41% reduction in energy use and a very small -- around 1% -- increase
in jobs. If the money were spent on the construction of education facilities,
there would be a 36% decrease in energy use and a 5% increase in jobs.
If the same sum were to be spent on national health insurance, there would
be a 64% reduction in energy required and a huge 65% increase in jobs.
If spent on improving the police and criminal justice systems, the $5 billion
would mean a 3% loss of energy, but again, a huge 53% increase in jobs.
And finally, if you took the $5 billion away from the government completely
and gave it back to the people through tax reductions, there would be a
23% decrease in energy use and a 7% increase in jobs.

These predictions may not prove to be absolutely
accurate, but the general trends are undeniably clear. Tens of thousands
of new jobs can be created if we use our wealth and technology creatively.
For example, Governor Milton Shapp of Pennsylvania has developed a plan
-- recently endorsed by other Eastern Governors -- to rehabilitate the
nation's railroads by investing $2 billion to $3 billion annually in restoring
roadbeds and new rails and rolling stock. Shapp's studies show that such
a program would create over 400,000 new jobs. Other areas where energy
efficiency and economic revitalization could go hand in hand are:

Building more subways and modernizing mass transportation
in all of our cities;

Providing the machines and incentives to bring
to birth new resource recycling industries in all parts of the country;

Giving an impetus to urban housing improvement
programs which will make our cities more compact, more efficient, and more
livable.

These are but some of the neglected areas of our
national life where we can generate jobs that will utilize the full potential
of America. These activities will require energy, but they will represent
a rejection of the idea that we can work our way back to prosperity by
building more gas guzzling cars, more energy-wasting glass houses, and
more and more junky, resource-wasting products.

U.S. energy use soared in the past twenty years
not because of need, but because energy was seemingly so cheap and so abundant.
But now our wasteful economy is in serious trouble. The solution lies in
learning to get to work, keep warm, and to run factories with less energy
per unit of service. That clearly can be done and is being done. If we
do this, the energy required per dollar of GNP will also go down -- and
the money saved can create thousands of new jobs. Once the full genius
of U.S. know-how is brought to bear on the problems of energy efficiency,
a stronger and sounder economic system will be created.

One thing is certain. The worst mistake any society
can make in a time of rapid change is to stand put. Each month we continue
energy consumption as usual, we are forfeiting valuable options. If we
are willing to make some hard decisions now -- and begin stretching our
oil resources now -- we can save tomorrow's jobs and share our remaining
petroleum resources with future generations as well.